Safety net hospitals serve areas where, on average, 14.9 percent of the population is uninsured and 32.5 percent of the population relies on government-provided health coverage such as Medicaid. Current Medicaid reimbursements often fall short of the full cost of care, so programs such as federal DSH funding help make up the difference. Obamacare cuts DSH funding in half by 2019 in an effort to reduce national hospital payments — but only because the cuts to safety net hospitals were intended be offset by the vastly expanded pool of newly insured low-income Americans. But Republican governors across the country are digging in their heels and refusing to expand the Medicaid programs in their states.
As a consequence, safety net hospitals that care for America’s most vulnerable could face significant financial burdens by 2019, and millions of low-income and disabled Americans may lose access to the medical services they need:
Now, the cuts to DSH –- unchanged by the court’s decision –- will come against a backdrop of great uncertainty regarding expanded coverage and the potential for significant shortfalls in federal support for safety net hospitals. [...]
This imbalance will have disastrous consequences on the nation’s vulnerable populations, who rely on the safety net for their health care needs. [...] In addition to directly threatening patients’ access to medically necessary health care services, the significant decrease in DSH payments, coupled with continued high levels of uncompensated care, will strain state and local budgets. This financial burden could lead to reductions in the availability of lifesaving services for vulnerable patients.
The NAPH study concludes that Congress should vote to restore DSH funding to avoid disastrous consequences for the American poor. But a simpler — and more efficient — solution than trying to wrench more money out of Congress would be for states to use the funds Obamacare has already allocated for expanding their Medicaid pools.
Numerous studies have estimated that states would save billions of dollars in health spending and improve millions of Americans’ quality of life by accepting federal funds to expand Medicaid. Unfortunately, GOP governors in states that have seven of the ten least-insured American cities have explicitly refused to participate in the expansion, denying millions of low-income Americans access to health care and potentially straining the future viability of hospital safety nets.